Private Equity Actors In Colombia
In anticipation of the first Colombia Private Capital Forum, in Bogotá, November 19, 2009, this post discusses the known private equity and venture capital players in Colombia.
Organized by the Latin America Venture Capital Association, and spearheaded by President Eduardo Elejalde of the Latin America Equity Fund Managers, who is one of the most experienced in the field in Colombia, the Forum promises to be a showcase for many of the major stakeholders, including institutional investors, fund managers, multilateral institutions, Bogotá lawyers, and Colombian government officials.
The participants, as of this writing, are scheduled to be:
- Luis Guillermo Plata, Minister of Trade, Industry and Tourism
- Pierre-Yves Mathonet, Head of Risk Management, Venture Capital Unit, European Investment Fund, Author, J-Cure Exposure, Managing a Portfolio of Venture Capital and Private Equity Funds
- Marieke Roestenberg, Investment Officer, FMO
- Friederike Hofmann, Investment Officer, SIFEM
- Erik Peterson, Regional Managing Director, Aureos Capital
- Jorge Ramos, President, ING Pensiones y Cesantías
- Susana Garcia Robles, Senior Investment Officer, Multilateral Investment Fund
- Eduardo Elejalde, Founding Partner, LAEFM
- Roberto Borras, Director of Financial Superintendency of Colombia
- Santiago Montenegro, President, ASOFONDOS
- Carlos Fradique-Mendez, Partner, Brigard & Urrutia
- Diego Henao, Transaction Services Partner, PricewaterhouseCoopers
- Dario Duran, Director, Altra Investments
- Hector Cateriano, General Director, SEAF Colombia
- Francisco Mira, Chief Executive Officer, Promotora de Proyectos
- Pablo Felipe Serna, Founder, SPOT Investments
- Carlos Gomez, Managing Partner, PalmFund Management
- Diego Serebrisky, Managing Director, Advent International
- Juan Pablo Pallordet, Director, Citigroup Venture Capital International
- Fernando Garcia Rossell, Senior Vice President, Brookfield Asset Management
- Ariel Muslera, Director of Strategy and Product Development, LAVCA
- Juan Pablo Ospina, GEM Colombia
- Peter Jones, Senior Advisor, Private Equity, Darby Overseas
- Camilo Casas, Corporacion Andina de Fomento
- Juan Pablo Cordoba, President, Colombian Stock Exchange
- Gustavo Ardila, President, Bancoldex
A number of these players — but not all — were already known for their role in private equity in Colombia. On March 15, 2008, Semana Magazine ran a detailed article listing the private equity funds operating in Colombia in reaction to legal reforms. The list is summarized below; legal reforms will be analyzed in the next posts in this series. A couple of more recent developments have been added.
Brookfield Asset Management closed a US$400 million infrastructure fund in early September 2009, as I wrote the following day. It raised US$320 million from other investors and is the largest private equity infrastructure fund in Colombia. A brief story in English is available on The Financial Post. It was reported on Portafolio (in English) that explains the basic purpose and principal in charge;
Brookfield Asset Management has formed a fund for investments in infrastructure projects, raising so far US$320mil, with most of the capital coming from Colombian institutional investors. Fernando Garcia-Rossel manages Brookfield’s business in infrastructure for the Andean region, while this fund aims to reach US$400mil. (Emphasis added.)
Brookfield’s decision was summed up perfectly by The Financial Post, in a way that asks similarly positioned investors, “Is this as spot-on as it sounds?”
“We saw an opportunity to enter a country we’ve been monitoring for a while,” said Denis Couture, senior Vice President, Corporate and International Affairs. “’The investment climate is positive and the need for infrastructure significant,” he added.
El Tiempo reported that The Global Emerging Markets Group (GEM) and Fiduciaria Bogotá, an affiliate of Banco de Bogotá, of the Grupo Aval, the largest financial group in Colombia, signed an agreement to create a private equity fund entity with US$220 million called “The GEM-FiduBogotá Colombia Private Equity Fund.” Grupo Aval is controlled by Luis Carlos Sarmiento Angulo, with 28 percent of the assets of national banks and CFCs. The arrangement was promoted by the ProExport office in New York, and the fund will provide capital to small and medium-sized domestic enterprises in the industrial sector through minority stakes.
Colpatria and Darby Highway Fund
The United States-based Group Darby Private Equity and Mercantil Colpatria launched an infrastructure fund specializing in business road development. The new fund intends to attract US $300 million in capital from pension and unemployment insurance funds.
Managers Darío Durán and Mauricio Camargo are focused on biofuels and pharmaceuticals. The fund began in 2005 and in the spring of 2008 had investments of US$80 million, in several business projects. One, a call center called Digitex, handles calls from Spain and has a presence in Guatemala, El Salvador and Peru. Another portfolio company is Colfrigos (cold storage facilities). Altra is also eyeing the pharmaceutical business in Peru, where it already has an investment in the company Infarmasa. Altra formed a distinct fund for each project. Altra’s group of investors include several of the most important family businesses in Colombia, plus American, Swiss, Venezuelan, and Peruvian investors. Their investment cycle is five to eight years.
Manager Jaime Maldonado seeks opportunities in logistics, distribution and retailing businesses. He was reported (by Semana Magazine) to be structuring “Arcadia” – a fund of at least US$30 million and up to US$100 million to gain control of companies in conjunction with the Correval firm (the investment manager). They had a portfolio of six companies where they could make their investments.
Manager Luc Gerard is aiming his fund at companies with highly specialized niche markets. Tribeca manages resources of institutional funds such as AFP and Interbolsa. Tribeca was one of the early leaders in the wave of private equity funds that arrived in Colombia and is among its best known names. Its portfolio investments include: EMI, specializing in the care of medical emergencies; Onda de Mar [Sea Wave], which manufactures swimwear; and Accede [Access], a telecommunications solutions provider. The funds has also acquired Etiqueta Negra [Black Label] in Argentina, one of the most exclusive apparel brands around.
Eduardo Elejalde is the undeniable leader of the PE/VC industry in Colombia, historically and currently focused upon oil and forestry. LAEFM has three established funds: Hydrocarbons I, with a value of US$62.3 million; Forest I, with a value of US$ 16.3 million; and Hydrocarbons II, which closed its initial funding round with US$52.2 and aims to reach US$70 million. LAEFM has investments in 15 oil projects with eight operators who have drilled several oil wells, and three of them are performing, while they seek to determine the commercial viability of others. They returned to their investors more than nine million dollars, as of spring 2008. The forest fund invests in commercial plantations that produce varieties such as Teak, Melina, Pine, and Eucalyptus.
Manager Hector Manuel Catariano is guiding SFAF’s pursuit of Colombian businesses with opportunities to compete abroad. His funds have achieved two investments as of spring 2008, with a value close to US$ 17 million. It holds shares in the company Refinancia, which specializes in buying portfolios of distressed debt. In addition they made an investment in Bodytech, the chain of sports and medical centers. They planned four additional investments of approximately three million dollars each. In addition to resources from pension funds and insurance companies they are looking for money from multilateral and bilateral agencies.
Manager Juan Carlos Gomez is looking at industries with opportunities arising from the potential free trade agreement with the United States, but this firm does not specialize in any sector. This firm has equity funds invested in Latin America and the United States with resources under management in excess of US$1 billion dollars. In Colombia they were, in spring 2008, at the stage of attracting investors to develop a fund of US$ 40 million.
Manager Javier Diaz is focused on small and medium-sized enterprises. It was seeking investors in spring 2008 and hoped to reach a level of between 30 and 50 million dollars. There were already commitments that correspond to a third of the expected capitalization.
Manager John White is also watching industries that show great potential under the proposed US/Colombia free trade agreement. This fund was seeking investors in spring 2008 and was projected to last for 10 years. He believes that Colombia is a country very attractive today for international diversification.
ND Capital Partners
Managers Julio Torres and Peter Grossich are oriented to the infrastructure project sector in Colombia and countries in the region. In spring 2008, they were structuring and funding ND Infrastructure Fund I. They hoped to raise between 100 and 150 million dollars, by June 2008 and were looking at road projects, power plants, transportation and oil and aqueduct and sewer projects and biofuels. They are mainly oriented toward projects in Colombia, Peru, Panama, Costa Rica, El Salvador and Guatemala.